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Friday, September 30, 2011

Sooo much money and nowhere to put it...

There is so much corruption in high places that one almost does not want to open the Morning Paper because there is bound to be another report of this government minister and that former high placed Civil Servant having helped himself to large sums of Euros out of tax payers money.
One case in particular fills the papers these days:
The late Premier of the Province of Carinthia had hired an accountant to advise him on the sale of a government owned bank. An Investment Bank (HSBC) had previously offered to handle this transaction for a fee of 3% of the eventual sales price.
"Will you do this for half" the Premier asked the CA, who quickly agreed to such a commission:
The Sale went through for about 800 Million Euros, and 12 million Euros became payable to the CA... "Will you take half of this?" asked the Premier and the CA, considering this an extraordinarily high fee, quickly agreed to accept 6 Million Euros. So into his account went payments of 4.5 million and 1.5 million Euros respectively.
If you look for any written reports, research material or opinions issued by the CA to the Premier, you won't find any.
It is said that the CA simply had a number of conversations with the Premier and his Deputy and during these conversations gave his opinion about a number of issues related to the sale of this Bank.. The potential buyer was already at the table ( was not found by the CA) and the CA never participated in any of the negotiations.
For doing very little work the CA collected a cool 6 Mio Euros.
During current investigations experts suggested that 200,000 Euros would be a maximum fee for the CA's involvement in this transaction.
There is quite a spread between 200 Gs and 6 Millions, isn't there? If my math is correct that's 3000%.
The question inevitably arises: Qui Bono ?  Who benefitted from this largess? Obviously the CA was a beneficiary of this fee. Is it reasonable to assume that the late Premier simply wanted to do a favour to a friend? (with Taxpayers' money) Or did he expect some of this money to find its way back to him or at least to his party? At this point nobody knows:
The CA swears up and down that he did not kick back any of the funds to anybody... We just have to take his word for it... 

...and now for a little rip off... (but not with taxpayers' funds)
There is a Company also operating in Austria, called "Nespresso" ( is it reasonable to assume that this is a subsiduary of Nestle, selling Espresso ? )
Well, this company, for its Vienna branch,  had a CEO, called Wolfgang W. who, as he testified at his trial, worked like a dog almost 24 hours a day to increase the sales of their product. Because he worked so hard, the sales increased by 50% and the money kept rolling in, so that finally nobody knew what to do with all that loot.
Wolfgang had a good idea: Knowing the weakness of his firm's accounting controlls, he formed a little company of his own whose only business it was to produce fake invoices and so Wolfi banked 2.7 million Euros into his own account, and for a little while Wolfi and his wife lived in grand style.
Well, as it happens so often, the mother firm conducted an audit and the jig was up.
At court he got off easily: Of the maximum penalty for a crime of this nature of 10 years he got only 4 years in jail. An Appeal is of course still possible and maybe, just maybe, Wolfi didn't do anything wrong.

Somebody give me cup o' coffee... quick
Bertstravels

2 comments:

Lianne said...

Well Nespresso is great - great coffee - great coffee maker - very expensive. There is a television show here on CNBC called "American Greed" and it chronicles all the past stories of such embezzlement, ponzi schemes and the like. The perpetrator's jail time is never as much as you might expect but every once in while a real big stealer will get 20 or more years. And since those sentences are federal in nature, there is no parole. Interesting stuff. Oh, and we know you don't have to be a ceo of a big company to get away with stealing a lot of money. Accountant's working for small management companies can do the same thing if no one is looking.

Bert said...

That is an unkind cut, even if it's the truth